Workers Just Won a Rare Supreme Court Victory Against Wall Street
The Supreme Court isn’t a friend of workers. So a recent ruling that retirees can sue employers who help investment firms rip them off with high fees and poor performance is a rare and crucial win.
A recent Supreme Court ruling gives 401(k) plan participants the option to take legal action against employers for including high-fee, high-risk investments in their 401(k) lineup. (Chenyu Guan / Unsplash)
A unanimous Supreme Court ruling Monday in Hughes v. Northwestern University ensures that Americans will still be able to sue employers and Wall Street banks that bleed dry their retirement accounts — a landmark precedent in protecting the $7.3 trillion Americans hold in 401(k) accounts.
The 8-0 ruling, written by Sonia Sotomayor, found that 401(k) plan participants could continue to take legal action against employers for including high-fee, high-risk investments in their 401(k) lineup, even if they also included lower-fee, lower risk options.
The decision could be a blow against powerful private equity industry titans, who for years have been aiming to convince 401(k) plans to include their high-fee, high-risk offerings. Blackstone Group CEO Stephen Schwarzman has said accessing retirees’ 401(k) accounts was “one of our dreams.”
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